Question

The balance sheet of Indian River Electronics Corporation as of December 31, 2017, included 13% bonds having a face amount of $92.0 million. The bonds had been issued in 2010 and had a remaining discount of $5.0 million at December 31, 2017 On January 1, 2018, indian River Electronics called the bonds before their scheduled maturity at the call price of 103. Required: Prepare the journal entry by Indiah River Electronics to record the redemption of the bonds at January 1, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account fleld. Enter your answers in whole dollars) View transaction list Journal entry worksheet Record the redemption of the bonds. Note: Enter debits before credits. Date General Journal Debit January 01. 2018 Record entry Clear entry View general journal

Answer 1

Journal entry, along with working

Date	Accounts title	Debit	Credit	Working explanation
01-Jan-18	Bonds Payable	$    92,000,000.0		[Face value]
	Loss on redemption/retirement of Bonds	$      7,760,000.0		[94.8 millions - 92 millions + 5 millions]]
	Discount on Bonds Payable		$     5,000,000.0	[remaining debit balance, now credited]
	Cash		$   94,760,000.0	[Cash paid on retirement = $ 92 million x 103/100]
	(Bonds payable redeemed)